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Poll: Model 3 Dissuasion?

Q1-2017 earning call reinforces that Model 3 is inferior to Model S. How does this affect you as a?


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Lets see.....what are some of the things we know.

Backseats will fold down - Elon Musk on Twitter
  • Determination of where to put Superchargers will be based on amount of orders - Elon Musk on Twitter
  • Initial Model 3's for Europe will come from Freemont, longer term plans to supply from Europe factory - Elon Musk on Twitter
  • Model S owners, even new owners will get will get a jump up on waiting list - Elon Musk on Twitter
  • RWD will be Standard, AWD upgrade (tweet)
    • AWD upgrade will be less than 5k (tweet)
    • AWD adjusts every ~.01 sec (tweet)
    • Production AWD will be faster than AWD cars used for reveal test drives (tweet)
  • There will be an optional Tow Hitch (tweet)
  • Dashboard will make more sense after part 2 reveal (tweet)
  • Aerodynamic coefficient goal is 0.21 (tweet)
  • The Model3 won't be a hatchback, but he believes they can increase the opening size (tweet)
    • Q: "The trunk opening on the model 3 now is rather very small, any chance of increasing its size?"
    • EM: "won't be a hatchback, but we should be able to increase the opening width and height"
  • Vegan Interior will be an option for Model3 (tweet)
  • He is serious about cowbells (tweet)
  • Tall people can fit ( tweet)
  • * 215 miles [346km] (or more) of range. ^Source
    * 215 of range accomplished with < 60kWh battery due to 30% denser energy storage. ^Source ^Source
    * Guesstimated wheelbase: 113.0 in. 287cm] ^Source
    * Guesstimated L x W x H: 184.1 x 74.2 x 56.5 in. 467.6 x 188.5 x 143.5 cm] ^ Source
    * Guesstimated curb weight: 4,200-4,350 lbs. [1,905-1,973 kg] ^Source
    * 0-60 mph in <6 seconds 0-100km/h in <6 seconds for RWD base version. ^Source
    * Supercharger compatible. ^Source
    * Single slot for HVAC on dash. ^Source
    * Designed to achieve 5-Star Safety Rating in all categories. ^Source ^Source
    * Seating for 5 adults. ^Source
    * Frunk. ^Source
    * Steel chassis with some aluminum construction. ^Source ^Source
    * Autopilot 2.X hardware capable of level 5 autonomy. Hardware includes 8 cameras of which 3 are front-facing, 12 ultrasonic sensors, forward-facing radar and powerful supercomputer. 360° visibility with 250m of range. ^Source
    * 400kWh (roughly 1000 miles / 1609km) yearly credit for supercharger use. ^Source
    * ~5’6” (167cm) of space from the back of the front seats to the end of the trunk ^Source, and you can fit a 7ft surfboard in the vehicle. ^Source
    * Hankook Tires (standard). ^Source
    * Rear driver’s side charging receptacle. ^Source
    * Originally was supposed to be called "Model E" but Ford killed SEX and took the name first. ^Source
    Options
    * ~~300+ mile [483km+] range battery. ^Source~~ Edit: Second-hand source, not yet confirmed.
    * There will be longer range battery available as an option, but a 100kWh version will NOT be available ^Source
    * ~~0-60 mph in <4 seconds 0-100km/h in <4.14 seconds] for dual motor / performance version. ^Source~~ Edit: Second-hand source, not yet confirmed.
    * At least 3 different wheel designs to choose from. ^Source
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Tesla Model 3 Details. Everything known so far
 
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IMHO, expecting Model 3 to be superior in any way than Model S with less than half of its price, is just ridiculous.
A car like any product has several attributes. So, saying something is superior is subjective since the person has ascribed value to attributes they think is important.

I like 3 because it is superior to S in a couple of attributes I value highly.
- Price is better (i.e. cheaper)
- Size is smaller (easier to park etc)
 
Obviously the 3 won't measure up to the S in every way just based on pricing alone. Having listened to the earnings call myself I think Elon may be downplaying the 3 more than it deserves to make sure Q2 numbers look good. I don't think it's going to be as epically boring as he was presenting this week. That being said I'm realistic about what I may get for 35k.

I think Elon went overboard during the call making the distinction and really belittled the 3 IMHO.
 
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Obviously the 3 won't measure up to the S in every way just based on pricing alone. Having listened to the earnings call myself I think Elon may be downplaying the 3 more than it deserves to make sure Q2 numbers look good. I don't think it's going to be as epically boring as he was presenting this week. That being said I'm realistic about what I may get for 35k.

I think Elon went overboard during the call making the distinction and really belittled the 3 IMHO.

It is Tesla's "reverse marketing", just like they do "reverse discounting".

If only they'd just let go of their obsession about no discounts and no advetising, they'd move tons of cars without having to badmouth their future product and resort in all sorts of unpleasantness in the quarterly numbers games.

Make a package deal of the Model S. Buy one until such and such a date and you'll get EAP and towing thrown in for free, just as an example. That would be a positive incentive to buy a Model S, instead of a negative one (Model 3 is crap, buy Model S).

Edit: Oops. No towing on the Model S, but you get the idea. :)
 
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It is Tesla's "reverse marketing", just like they do "reverse discounting".

If only they'd just let go of their obsession about no discounts and no advetising, they'd move tons of cars without having to badmouth their future product and resort in all sorts of unpleasantness in the quarterly numbers games.

Make a package deal of the Model S. Buy one until such and such a date and you'll get EAP and towing thrown in for free, just as an example. That would be a positive incentive to buy a Model S, instead of a negative one (Model 3 is crap, buy Model S).

Exactly! I'm a shareholder and I completely agree. No advertising, discounts or incentives has gotten them this far and that's fantastic but now it's time to rethink that strategy. Like you said, let's be positive about all the products instead of bashing one to sell another. Most people I come across here don't even know what that "T logo" car is.
 
Exactly! I'm a shareholder and I completely agree. No advertising, discounts or incentives has gotten them this far and that's fantastic but now it's time to rethink that strategy. Like you said, let's be positive about all the products instead of bashing one to sell another. Most people I come across here don't even know what that "T logo" car is.

It's not quite no advertising. Tesla employs guerrilla marketing all the time. What is that owner referral credit?
What is that shiny car at the mall entrance?
Yesterday on radio, I heard the radio hosts (of 94.5 kbay IIRC) were invited to Tesla San Jose. Every once in a while the host was singing the praise of Tesla. I don't call this no advertising.
Tesla has also discounted in the past(Q3 2016) and does even now.

Now here is someone else anti-selling his electric car. He didn't put the opposite as the final goal of his master plan though. Or collect the deposits a year or two ahead of launch.
Fiat Chrysler CEO: Please don't buy Fiat 500e electric car
 
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@mmd You are right that Tesla of course does some marketing. But the point is they don't advertise and they don't - as the official company line so far (though Q3/2016 they crossed the line) - do discounts/discount campaigns, both of which would be positive ways to move Model S - instead of having to go negative on the Model 3.

Model S is showing its age against a new entrant to the product range. The traditional fix: 1) Conjure up things that make Model S more appealing (like discounts or discounted options). 2) Advertise it. 3) Don't badmouth your new product.

Once those marketing tactics that Tesla has are not enough, they have instead resorted to reverse marketing (anti-sell Model 3 to sell Model S) and reverse discounts (announce future price increases), which obviously have some effect, but also have negatives and limits to their effectiveness... the end result is, Tesla is seen as playing games and the customerbase is confused at best about the mixed messages.

Tesla needs to broaden their marketing toolkit, IMO. What used to be simple is now actually making things complex as the old simple way is not enough and complex tricks are needed to sort of keep the simple way...
 
Thanks for the extensive list!

To me, when comparing to Model 3, Model S seems to be ancient because:

1) It lacks towing capability
2) It doesn't use latest batter tech with 30% denser energy storage of 2170 format.

Model 3 uses those two latest tech features so it is not true that Model S has the better and latest tech!

Indeed, and 2) is not expected to be fixed soon perhaps only in 2018 or something?

Also possible: Model 3 may get a new charging port and a new big screen computer. If so, surely such things would also be announced for Model S/X, but they might only apply to Q3 builds.

These are reasons to wait and see.
 
@mmd You are right that Tesla of course does some marketing. But the point is they don't advertise and they don't - as the official company line so far (though Q3/2016 they crossed the line) - do discounts/discount campaigns, both of which would be positive ways to move Model S - instead of having to go negative on the Model 3.

Model S is showing its age against a new entrant to the product range. The traditional fix: 1) Conjure up things that make Model S more appealing (like discounts or discounted options). 2) Advertise it. 3) Don't badmouth your new product.

Once those marketing tactics that Tesla has are not enough, they have instead resorted to reverse marketing (anti-sell Model 3 to sell Model S) and reverse discounts (announce future price increases), which obviously have some effect, but also have negatives and limits to their effectiveness... the end result is, Tesla is seen as playing games and the customerbase is confused at best about the mixed messages.

Tesla needs to broaden their marketing toolkit, IMO. What used to be simple is now actually making things complex as the old simple way is not enough and complex tricks are needed to sort of keep the simple way...
You may want to read up on various forms of advertising.
Advertising - Wikipedia

Just because Tesla doesn't put up a super bowl ad doesn't mean they don't advertise. Tesla's market is a niche, and a broad advertisement could just be waste of money with little return. BMW I3 advertised in Superbowl. Is it selling in large volumes in US?

Anybody who can afford a Tesla MS/MX in US and doesn't yet know about Tesla or its car must be living in some cave. People in this income group all have investments. With Tesla's market cap and constant debate and news flow, it is impossible to miss it.

The only difference in case of Tesla is , it does these covertly.
I think, Tesla knows best where to deploy their advertising budget to maximize return, and that's what they are doing.
 
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You may want to read up on various forms of advertising.
Advertising - Wikipedia

Just because Tesla doesn't put up a super bowl ad doesn't mean they don't advertise. Tesla's market is a niche, and a broad advertisement could just be waste of money with little return. BMW I3 advertised in Superbowl. Is it selling in large volumes in US?

Anybody who can afford a Tesla MS/MX in US and doesn't yet know about Tesla or its car must be living in some cave. People in this income group all have investments. With Tesla's market cap and constant debate and news flow, it is impossible to miss it.

The only difference in case of Tesla is , it does these covertly.
I think, Tesla knows best where to deploy their advertising budget to maximize return, and that's what they are doing.

I am sure you still got my point, though, no matter the words.

Tesla has not bought ads or done official discounts/discount campaigns ever or nearly ever. Those are, thus, tools that they could use to push Model S sales and have not used, nor exhausted yet as demand levers. My point being: they would be better demand levers to try out rather than having to badmouth Model 3 or playing all sorts of covert tricks, especially if latter are losing their effectiveness.

An up-and-up, positive paid ad campaign with a suitable discount/discount pack for Model S. There's a tool they should use. Badmouthing Model 3 may backfire in the end, as well. Sell the positives!
 
You may want to read up on various forms of advertising.
Advertising - Wikipedia

Just because Tesla doesn't put up a super bowl ad doesn't mean they don't advertise. Tesla's market is a niche, and a broad advertisement could just be waste of money with little return. BMW I3 advertised in Superbowl. Is it selling in large volumes in US?

Anybody who can afford a Tesla MS/MX in US and doesn't yet know about Tesla or its car must be living in some cave. People in this income group all have investments. With Tesla's market cap and constant debate and news flow, it is impossible to miss it.

The only difference in case of Tesla is , it does these covertly.
I think, Tesla knows best where to deploy their advertising budget to maximize return, and that's what they are doing.

While I don't necessarily disagree with your overall point I would say that there is always room for improvement. Tesla doesn't walk on water and just because something has been one way in the past doesn't mean it needs to be in the future. I think some level of focused advertising, marketing or discounts more that the referral program would only increase penetration in the market. Tesla wants to accelerate sustainability, well you can't do that by focusing only on the niche.

The anti-selling in the earnings call even had me wondering if I wanted a 3 anymore, it was that bad.
 
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While I don't necessarily disagree with your overall point I would say that there is always room for improvement. Tesla doesn't walk on water and just because something has been one way in the past doesn't mean it needs to be in the future. I think some level of focused advertising, marketing or discounts more that the referral program would only increase penetration in the market. Tesla wants to accelerate sustainability, well you can't do that by focusing only on the niche.

The anti-selling in the earnings call even had me wondering if I wanted a 3 anymore, it was that bad.

Indeed. There's actually a name for it, the Ratner Effect i.e. badmouthing your own product (after Gerald Ratner - Wikipedia), which is at times compared to the Osborne Effect.

The thing is, when badmouthing Model 3, Tesla can not know all those people are converted into Model S. Some people will just hear Tesla saying Model 3 is bad. If they can not afford a Model S, they've got nowhere else to go to anyway, except away.

In fact, for some audience - just like when buying that Audi A4 after being enamored by a distant Audi R8 - buying the "baby version" of the halo product is a big part of it all. They love the Model S that is beyong their reach and consider Model 3 getting a lot of the way there. And the manufacturer would be wise to play off of that sentiment (and many very successfully do) instead of destroying it by underlining how different the products are...

If Tesla were to market the Model S, that can help both Model S and Model 3 sales, as it helps the brand and has a positive message. If Tesla antisells Model 3, it may damage Model 3 sales, without necessarily helping Model S sales.
 
the 'anti-selling' approach tells me they are (or have been) worried about potential S/X buyers reserving a Model 3 instead of ordering a S/X and they likely are seeing a canabization trend much greater than expected. (Even though there have likely been a significant number of Model S/X sold to Model 3 reservation holders). IMO it's much more about current quarter sales than anything to do with the Model 3. Go back and watch the reveal - I am sure Elon is still as excited about the Model 3 being a great car as he was that night.
It will be interesting to see how the narrative flips 6-9 months from now when the anti-selling campaign stops and Model 3s are being delivered.
 
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the 'anti-selling' approach tells me they are (or have been) worried about potential S/X buyers reserving a Model 3 instead of ordering a S/X

Obviously.

they likely are seeing a canabization trend much greater than expected

Possible, though it should not be a surprise to them. They should have planned for it.

IMO it's much more about current quarter sales than anything to do with the Model 3.

Definitely. Though it remains to be seen if their worry is Q2/2017 only, or if they also worry about Q3-Q4, if Model 3 ramp-up is slow and/or early premiums are low, in which case their worry about Model S/X sales could go on further than just until Model 3 launch.

Go back and watch the reveal - I am sure Elon is still as excited about the Model 3 being a great car as he was that night.

Oh, I'm sure he is. But the anti-selling is starting to be very reminiscent of the Ratner Effect: Gerald Ratner - Wikipedia

It has its risks. And most importantly it is so unnecessary. They could sell Model S through normal, positive sales incentives.

It will be interesting to see how the narrative flips 6-9 months from now when the anti-selling campaign stops and Model 3s are being delivered.

The narrative will flip, no doubt. Making it one more thing in a long list of quarterly games Tesla plays, simply because they can't admit the time to start doing normal stuff like discounts/campaigns and advertising is nigh.